Are you looking to take your finance career to the next level? Then it’s time to brush up on your FP&A skills. Financial planning and analysis (FP&A) is a critical part of any successful business, and having the right set of skills can help you get ahead in this competitive field. We have compiled 11 essential FP&A skills to give you an edge in your finance career.
With these skills, you can become a more effective financial analyst or manager, helping businesses make better decisions with their money. You’ll be able to identify trends before they happen and spot potential problems early to take corrective action quickly. Plus, you’ll gain invaluable insights into how different areas of the business interact with each other financially.
Read our article now for all 11 essential FP&A skills!
What Is FP&A?
Financial planning & analysis (FP&A) is a core finance function that uses advanced financial analysis and forecasting to inform planning, strategy, and decision-making. It typically includes budgeting, strategic planning, capital planning, forecasting, cost management, capital investment analyses, profitability analysis, pricing decisions, scenario planning, and cash flow management.
At its core, FP&A helps organizations make informed decisions about their finances. Using analytics and forecasting techniques, FP&A professionals can identify key insights for the leadership team and opportunities for cost savings, revenue growth, and other efficiencies leading to improved performance.
FP&A teams typically consist of a mix of financial analysts and accountants who are knowledgeable in critical areas such as accounting principles, budgeting process, financial modeling, data analysis, strategic financial planning, financial forecasting, cost management, and capital investment analyses.
11 Corporate Finance Skills All Finance Professionals Need
Regardless of the business model, every company has a need for finance professionals to drive business success. Having these skills will help you become a more effective financial analyst or manager, helping businesses make better decisions with their money. A special thanks to Nicolas Boucher, a fantastic thought leader in the FP&A space, for the infographic. Check out his content on LinkedIn or through his website.
1) Business Acumen
As a finance professional, it isn’t enough to just know finance; you must understand the business unit you support. A solid understanding of the business and its operations helps you understand how different business areas interact financially.
2) Finance Business Partnering
Being a finance business partner requires having strong leadership skills and the ability to communicate complex financial concepts. Finance professionals need to be able to develop relationships with people across the organization and help them understand how their decisions affect the company’s bottom line.
Data storytelling is key for finance professionals. This means looking beyond the numbers and explaining their relevance and importance to the company’s future. This helps move the conversation to a more strategic level, furthering understanding and buy-in from stakeholders.
4) Communication Skills
Communicating your findings effectively is key for any financial analyst or manager. It’s important to be able to explain complex financial concepts to in a way that anyone can understand and listen to different perspectives.
The ability to influence others is important for any finance professional. You need to use your financial knowledge and expertise to persuade business leaders to get them on board with your plans or ideas and solve financial problems.
6) Financial Analysis Skills
Financial analysis involves using specific tools and techniques to analyze historical data, real time data, and financial projections. Analyzing data can help you identify trends, risks, strengths, and weaknesses that may not be immediately apparent from just looking at the numbers. You will also need to develop and monitor key performance indicators (KPIs) to measure the financial health of your organization.
7) Financial Planning, Budgeting, And Forecasting
Budgeting and forecasting require strong analytical skills and an understanding of the current business environment and key metrics. You need to be able to develop an accurate financial model that will help you plan for the future and make decisions about resource allocation. You need to be able to drive a planning process and manage its execution effectively.
8) Cost Accounting
Cost accounting involves analyzing the cost of production, labor, materials, and other expenses. It’s a great way to identify areas where you can cut costs or increase efficiency in order to boost profits. Cost accounting also provides valuable insight into how financial resources are being used and the cost of doing business.
9) Accounting Principles
Having a strong understanding of basic accounting principles is essential for any financial analyst. This includes recognizing and reporting assets, liabilities, equity, revenue, and expenses. It also involves understanding the financial statements and how they relate to each other.
10) IT Literacy (Financial Systems)
Having a working knowledge of financial systems and technology can greatly benefit any finance professional. This includes navigating different software systems, databases, and spreadsheets. That way, you’ll be able to find the key data you need to make informed decisions. Additionally, it’s important to be able to use technology tools to analyze and report on financial performance.
Bonus Skill: Staying On Top Of FP&A Trends
Digital finance describes a broad range of new technologies applied to financial processes. Moreover, the skill set needed in a finance department is also changing. Many IT organizations haven’t caught up or don’t have the resources to run these new tools. In other words, finance professionals have an opportunity to upskill and become UX designers and coders to support these new tools. The future is about automation, self-service, and a greater depth of analysis and insight.
Here are the skills most in demand:
- Data Curation (Alteryx, Python, SQL)
- Advanced Analytics (Python, Crystal Ball, Alteryx, R, and Knime)
- Visualization (Qlik, Tableau, Thoughtspot)
- Machine Learning (Python, Knime)
- Generative AI (Open-AI)
- Systems Integration (Azure)
- Agile Methodology (Scrum, Kanban)
- Process Automation (UiPath, Blue Prism).
By staying on top of these trends and learning to use them effectively, finance professionals can increase their value in any company. In turn, they’ll have the skills necessary to understand financial data more meaningfully and help their company succeed.
How To Build Corporate Finance Skills In 12 Months
If you’re looking to revamp your corporate finance skills, there are a few steps you can take. Start by getting familiar with the latest trends and tools available. Read industry-related publications, attend conferences, or take an online course. You should also seek out mentors who can offer advice and help hone your skills. Here is a 12-month roadmap to help develop your corporate finance skillset.
- Learn to operate analytical tools: Most of these tools offer free trials. Use them to learn and practice.
- Analyze Company Financial Statements: Pick any public company and analyze its financials. Make it a habit to do this regularly.
- Participate in Business Case Studies: This will give you a holistic view of business operations and the role of FP&A in decision-making.
Months 1-2: Begin with online courses on platforms like Coursera, edX, or Udemy. Courses like “Financial Analysis and Decision Making” or “Budgeting and Forecasting” can be beneficial.
Months 3-4: Read books such as “A Practitioner’s Guide to Business Analytics” by Randy Bartlett or “Financial Modeling and Valuation” by Paul Pignataro to deepen your understanding. Attend webinars and workshops related to FP&A for real-time learning and networking.
Months 5-6: Start applying your knowledge. Use analytical tools to interpret financial data. Websites like Kaggle offer datasets that you can use for practice.
Months 7-8: Analyze real company financial statements. Sites like Yahoo Finance provide financial statements of public companies. Try to forecast their future performance based on past data.
Months 9-10: Participate in business case studies. Websites like Harvard Business Review have extensive case studies that can provide practical exposure.
Months 11-12: Continually refine your skills. Consider getting certified by recognized bodies like the Association for Financial Professionals (AFP) to enhance your credibility.
Frequently Asked Questions
How Can I Be A Good FP&A Analyst?
Being a good FP&A analyst requires excellent technical skills, an understanding of financial concepts, and the ability to make sound business decisions. To become an effective FP&A analyst, you need to have strong analytical and problem-solving abilities, knowledge of accounting standards and principles, and experience in financial modeling. Additionally, you should be able to think strategically and be comfortable working with numbers. Finally, having strong communication and interpersonal skills will help you foster relationships with key stakeholders.
What Type Of Education Do I Need To Become An FP&A Analyst?
Most employers prefer candidates with a degree in accounting, finance or economics. In addition to educational qualifications, experience in financial modeling and analysis is also preferred. You may want to get certified by recognized bodies such as the Association for Financial Professionals (AFP) to enhance your credibility. Finally, knowledge of relevant software and technology will benefit this field.
What Are FP&A Core Responsibilities?
The core responsibilities of an FP&A analyst typically include analyzing financial results, identifying trends and risks, creating financial models and forecasts, providing decision-making support through business cases, and monitoring performance. An FP&A analyst should also be able to develop reports, provide recommendations on cost savings initiatives, maintain budgets and conduct variance analysis.
Corporate Finance Skills Versus FP&A Skills
FP&A and Corporate finance are two distinct yet intertwined fields. Corporate finance involves larger-scale financial activities such as capital acquisition and investments, while FP&A focuses more on forecasting, planning, budgeting, and analyzing a company’s short-term operations. While the technical skills may vary, the soft skills needed to succeed in corporate finance are similar to those required in FP&A.
Financial planning and analysis (FP&A) is a key function of corporate finance that helps organizations achieve their goals, maximize their potential and increase profits. FP&A professionals must possess soft skills such as business acumen, communication skills, storytelling, and influencing, as well as technical abilities like financial analysis, budgeting and forecasting, cost accounting. accounting principles, and IT literacy.
As digital finance and new technology continue to evolve, the FP&A skillset needs to keep up with data curation, advanced analytics, visualization, and machine learning. With the right mix of technical knowledge and soft skills, any FP&A professional can propel their career forward.
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